South Fayette's local drilling ordinance conflicts with Pennsylvania law, according to an official opinion published by the state Public Utility Commission this morning.
That ruling marks the first official review completed by the commission, which was tasked in the new Marcellus Shale law with determining whether municipal rules overlap with aspects of drilling already regulated by the state.
The Allegheny County town's ordinance was challenged this summer by resident and school board member William Sray, who has leased land to Chesapeake Energy for development.
Mr. Sray argued in his letter seeking review that the town's ordinance improperly sets reporting requirements for water withdrawals and hazardous waste disposal, mandates an environmental impact statement from operators, regulates certain types of air emissions and imposes standards for post-drilling restoration.
In the PUC's decision letter today, the commission deemed that each of those provisions in South Fayette's ordinance conflicts with sections of the drilling law that have remained in effect since the Commonwealth Court overturned part of the statute in July.
Those local requirements already are regulated in state law, and therefore "present an obstacle to the underlying legislative purpose of the Act requiring only one set of state level" requirements, according to the letter.
Municipalities with drilling rules deemed unacceptable are ineligible for the annual impact fee dollars that drillers pay on each of their gas wells.
The vast majority of this year's $204 million in impact fee revenues will be distributed within the next week, but the commission announced Monday that it would withhold money from the four towns -- South Fayette, plus Cecil, Robinson and Mount Pleasant in Washington County -- because of their pending ordinance reviews.
South Fayette would be eligible for $2,731.39 from those new fees. The PUC stated in its letter that if the town's ordinance is revised by Nov. 28 -- several days before the agency's Dec. 1 deadline for distributing the money -- South Fayette could still receive that payment.
If the township doesn't revise its ordinance to bring it into compliance, South Fayette's portion will be set aside and added to the impact fees that are distributed next year.
In a response letter last month regarding Mr. Sray's request for review, an attorney for the township had disputed the commission's authority to review ordinances in light of the ongoing legal battle over the statute.
Reached for comment on this morning's ruling, Deron Gabriel, president of South Fayette's board of commissioners, said the township intends to stand by its ordinance.
"Our only consideration is protecting the health, safety and welfare of our residents and the character of their neighborhoods," Mr. Gabriel said, describing the decision as "more retribution" for South Fayette's opposition to the state law.
The township is among a group of municipalities challenging the new drilling law, which set statewide zoning guidelines. The group won on the key parts of their challenge at Commonwealth Court, but the state appealed to the state Supreme Court, which heard arguments Wednesday.
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Harrisburg Bureau Chief Laura Olson: email@example.com or 717-787-4254. First Published October 18, 2012 12:15 AM